Why metal stocks are up?

I remember, the metal index sidewise, trade was happening from January to July in 2019. After that, you get to see a big drop in the metal index till August. The decline was halted that by the time December end, and it didn’t even start growing a little bit. But there was a very sharp decline of about 50% in January. I am able to tell you all this because I am a value investor, and I love all the sectors which are undervalued.  Whether or not to see the stocks which share price are going upward, but I like the sector which is going downward. Whether you believe me or not, but that was the best time to invest in this sector. Yes, I know you might think that there was the best time for all the sectors to make an entry. But Value investment has a rule. Due to the fear of people, the shares which are cheaper than most are the right hunt for you. In the midst of Covid-19,

the metal sector had fallen even before the market fell. It was because China imports metals from us, and we see the first fall in the metal index due to the economy being shattered there at Wuhan.

From this, we came to know that demand and supply much plays a big role.

Seeing the slowdown in the market, now let’s find a reason for the rise in metal share price.

Oxygen shortage -:

You might wonder what is the relation of metals shares to the Oxygen shortage issue. But there is a very big relation. Perhaps you may or may not know, generally, the fuel used for making metals is coal. And coal alone is not enough to achieve a high temperature in a short time.

This is the reason why Oxygen is used as a fuel along with coal in the metal industry. But right now, due to Covid 19 and not having the demand for metals, the same companies are making oxygen for people.

As soon as the first lockdown ended, the light demand for metal was found in the market. Due to not being a sufficient supply, the rate of metals started touching the sky. And the investor knows this well that unless the covid situation solved, the production of the metal will not be sufficient due to oxygen shortage.

And when the price increases due to the demand for a commodity, then the companies in that sector become very profitable. This is the reason for the metal stock rally, and what is needed investors to attract metal stocks.

Dollar index fall-:

The dollar index has a greater impact on the commodities indices, companies’ profitability and on economy. In the case above, you can see how well it has been made by taking the six major worth currencies of the economy.

With this, we will see our stock market also fall. But for now, this index is falling further very sharply.  Our imports price has been cheaper for this reason, and the price of crude as well. And you know, whenever the rate of crude falls,

China going green-:

The work on China’s Go Green project is started. Keeping in view of air pollution, they are shutting down more and more manufacturing industry, which has the chance of getting more pollution. And in this list metal companies also included.

But we can see clearly metal demand in the international market, and the low-price manufacturing of India will attract so many companies from several countries. It is a big reason for this bull run behind this sector.

An investor has smelled this upcoming big profit in this sector.